Why Mainers Should Be Outraged Over Worst Power Outage In State's History

Nearly half of the people living in Maine spent a significant part of last week in the dark after a storm caused widespread power outages.

Central Maine Power, a subsidiary of the Spanish utility holding company Avangrid, reported an estimated 400,000 customer accounts – more than 60% of the utility’s customer base – were without service on Monday.

“This is the largest number of outages in the company’s history,” said Gail Rice, a spokesperson for CMP.

Maine’s economy lost vast sums of money as a result of the power outages.

William Pentland

Rooftop Solar In Kennebunk, Maine

The Electric Power Research Institute estimates that the economic costs of power outages amounts to about $120 billion annually in the United States. According to EPRI’s calculations, a mere reduction of 10% in outage duration would be expected to reduce the economic impact of outages for CMP’s customers by over $100 million annually.

In the wake of last week's storm, businesses in Maine had to cease operations – some had to do so for the better part of an entire week. Tourists visiting the state went home. Residents fled to nearby states like Massachusetts where power outages were comparatively shorter. I personally had to stay with a friend in Massachusetts for most of the week so that I could work.

On Thursday, I returned to my home near Portland when I read on the utility’s website that power would be restored on my street by 10 pm that evening. I arrived a few hours before 10 pm so that I could clean out my refrigerator and freezer, which were full of spoiled food worth at least one or two hundred dollars. I also had to get rid of the fish in my aquarium. They had all died from the cold because the water heater depends on electricity to operate. I didn’t have any heat for the same reason my fish did not – it depends on electricity.

The promised restoration time came and went. Still no power. I had to carry a battery-operated lantern around as it was darker inside my house than it was outside, which at least had the light from the moon. During the night, I slept fully clothed under a mountain of blankets. I mostly managed to stay warm. On Friday, I worked in the front seat of my idling car in the parking lot outside of the public library, which had power and thus internet access. Needless to say, I was less productive than usual.

Over the course of the week and especially on Friday, I called CMP's customer service lines too many times to count. I never got an answer. The company’s website was worse than useless and I made a point of telling the state’s utility regulators in a complaint I filed on Friday.

What information the company has provided about restoration has been wrong. The website contains inaccurate information about the outages. For example, the company falsely claimed to have restored my power last night. The mistake was only corrected about 12 hours later. Keep in mind that my residence has a smart meter that should be readable remotely. This level of service and the company's gross incompetence is not acceptable for a 21st century economy.

The last sentence in my complaint is the operative one for purposes of this piece. If Maine's Gov. Paul LePage is serious about strengthening Maine’s economy, he needs to recognize how wrong headed his “energy policy” has been.

Since his election in 2011, Gov. Paul LePage of Maine has made reducing the state’s electricity costs a priority. Despite the administration’s focus on cutting energy costs, LePage has not really done much other than lambast the solar industry for seeking “subsidies” and blaming deregulation for increasing prices. In 2016, Maine had the lowest average electricity retail prices in New England, according to the Energy Information Administration. Aside from the confusing rhetoric, the only actual “policy” LePage seems to have is providing political support for mega-scale utility projects proposing to bring “cheap” power into the state from Canada.

In 2012, Gov. LePage introduced a bill designed to lower electric costs by removing a limit on renewable energy credits for hydropower would unleash a flood of cheap power from Quebec. The bill never made it through the legislature in 2012. Since then, several attempts to reintroduce essentially the same bill have similarly died in the legislature. Indeed, according to Tux Terkel at the Portland Press Herald, “it has become a joke among lobbyists and some state officials that if it’s March, it’s time to dust off their testimony for or against the 100-megawatt cap, as the bill has become known.”

Solar companies did not cause the prolonged power outage in Maine. Neither did deregulation. CMP did. Yes, the same utility company with the slogan "Flip a switch and we're there."

Contrary to what one would suspect based on the slogan, CMP’s incompetence and lack of planning turned what should have been a short power outage into a prolonged and painful experience. The mega-scale utility projects proposed by CMP and supported by LePage’s administration would not have made an iota of difference.

Central Maine Power spent more money over the past few years than any other U.S. utility owned by Avangrid.

In 2008, CMP proposed an investment plan for the construction of upgrades to the bulk power transmission grid in Maine, the largest transmission investment in the history of Maine, which includes the construction of five new 345-kilovolt, or kV, substations and related facilities linked by approximately 440 miles of new transmission lines.

“If we don't do this, the lights will go out in southern Maine,” said Sara Burns, the former CEO of CMP, in 2008.

To put the scale of this transmission investment in perspective, only about 1.3 million people live in Maine, according to the U.S. Census Bureau. This means CMP spent about $2,500 for every single customer it serves in Maine on a single transmission project.

To be fair, investments in the transmission grid are socialized across more than one state. In other words, ratepayers in Massachusetts, New Hampshire and other New England states are likely to pay more for the MPRP than CMP’s customers in Maine. On the other hand, an analysis by the Brattle Group found that over the longer term, socialization of transmission costs will cost Maine ratepayers more than if these ratepayers bore the full cost of the MPRP but no allocated share of other transmission projects in the region.

If last week’s outages are any indication, the MPRP does not appear to have increased the reliability or quality of electric service for CMP’s customers.

“The MPRP should never have been built,” said Rich Silkman, the president of Competitive Energy Services. “There were viable alternative solutions that could have been used in lieu of the MPRP and they would have cost a fraction of the what the MPRP has cost.”

As it turns out, CMP’s shareholders are not likely to pay more than a tiny fraction of the costs of restoring power last week.

In 2014, the Maine Public Utilities Commission approved an agreement that allowed CMP to share storm costs on a fifty-fifty basis with the utility’s customers. However, CMP would never be required to pay more than $3 million annually in storm costs. Customers are on the hook for the entire bill when storm costs exceed $3 million.

In other words, CMP’s customers – not CMP’s shareholders – had to pay paid to restore their power after last week’s storm.

UPDATE

According to a flyer from the Maine Hunger Initiative, some Maine residents receiving state food aid who lost power for more than four hours may be eligible for food-replacement benefits. Here is a link to the flyer.

William Pentland is a Vice President for Regulatory Strategy and Special Projects at Genbright LLC. Views expressed are solely those of the author and should not be attributed to Genbright.